In order to attract more veterans to the CalVet program, the department should continue working with the Federal Housing Administration and the Ginnie Mae to lower its interest rates on loans.
Dept Response: CalVet has successfully completed the restructuring of our outstanding Farm and Home bonds that have enabled us to adjust our interest rates. As such, CalVet's rate is extremely competitive with the commercial market and loan production is up 100% as compared to the same time last year. Further, as we stated before the recommendation is not feasible to implement because FHA will not accept the use of our land sales contract in conjunction with FHA insured mortgage financings and in fact has twice denied our request to for approval.
CalVet indicated that its continued efforts to work with the FHA were not successful. However, through other means its has successfully lowered its interest rates on loans since Ocober 2009, when the state auditor's report was released.
The recommendation is not feasible. The department has requested approval from FHA to use our contract of sale (contract used for our loan transactions) with FHA mortgage insurance. FHA has twice denied the use of our land sales contract in conjunction with FHA insured mortgage financing. (attached copy of FHA's second denial)
Agency responses received after June 2013 are posted verbatim.